2017/77 k nKonw A A weldegdeg e ol n oNtoet e s eSrei r e ise s f ofro r p r&a c t hteh e nEenregryg y Etx itcrea c t i v e s G l o b a l P r a c t i c e The bottom line Electricity Tariffs for Nonresidential Customers The aggregate price per kilowatt- hour charged to commercial and in Sub-Saharan Africa industrial customers varies by a factor of more than 20 across What do Africa’s electricity bills tell us? Tariff design for nonresidential customers can differ markedly 38 Sub-Saharan African countries from that for households. Because of equity considerations, studied. Tariff schedules also Prices for nonresidential power customers vary cross-subsidization of low-consumption households by higher-con- show large differences: Nearly widely across the subcontinent, as do patterns in sumption households is common. In contrast, tariffs for medium- and half the countries do not use tariff structure high-voltage customers are often designed to capture economies time-of-use pricing, about a fifth of scale (arising in part from significant fixed supply costs), with have no demand charges, and Tariff schedules reflect the level of power sector development, the unit charges typically declining with consumption. While residential three have neither demand nor costs of service delivery, and government subsidy policy. Together customers may face fixed charges to cover the cost of meter fixed charges for any customer with service quality, they shape the decisions of local businesses and reading, maintenance, and billing, medium- and large-consumption category. As Africa’s power sector investors. customers are more likely to face “demand charges,” which require develops, there is considerable Tariffs in most countries in Sub-Saharan Africa are below cost- them to pay the utility to supply electricity up to the contracted scope to tailor tariff schedules recovery levels, and power shortages are widespread. Tariffs are demand even if they do not always use all of their contracted power to meet the needs of different exceptionally low in a handful of countries, exacerbating the cost- capacity. In a variation of this pricing mechanism, the charge may customers, reduce the costs of recovery problem, and high in many others, hobbling competitiveness, depend on the highest actual demand recorded over a given period. supply, and ensure minimum while still not covering costs.1 Demand charges are intended to help utilities recover the fixed costs revenues from medium-size This note reviews regulated grid electricity tariffs and monthly of service delivery. and large customers. Doing electricity bills for nonresidential customers in 38 countries in The regulated tariff schedules in the countries covered range so would strengthen utilities’ Sub-Saharan Africa.2 It is based on information collected from power widely, both in their structure and in unit prices. In Liberia all cus- financial health and increase the utilities and regulators on tariffs, taxes, and other charges in effect in tomers pay the same price per kilowatt-hour (kWh), regardless of quantity and quality of electricity July 2014.3 level of consumption or other attributes. In South Africa tariffs are delivered. differentiated by voltage levels, time of day, season, and customer 1 Kojima and others (2016) and Kojima and Trimble (2016) analyze tariff schedules and connec- tion charges for residential customers in the same countries covered here. Trimble and others category, and customers may pay fixed and demand charges as (2016) compare tariff levels with levels of cost recovery, decomposing shortfalls in cost recovery well as levies for cross-subsidization. Country-to-country variations Masami Kojima is a lead into underpricing, system losses, collection losses, and overstaffing. 2 The countries are Angola, Benin, Botswana, Burkina Faso, Burundi, Cabo Verde, Cameroon, in unit prices are considerable among the sample, far more so than energy specialist in the World Bank’s Energy and Chad, Comoros, Côte d’Ivoire, Ethiopia, The Gambia, Ghana, Guinea, Kenya, Lesotho, Liberia, in the countries of the Organisation for Economic Co-operation and Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia, Niger, Nigeria, Rwanda, Extractives Global Practice. São Tomé and Príncipe, Senegal, the Seychelles, Sierra Leone, South Africa, Swaziland, Tanza- Development (OECD). nia,Togo, Uganda, Zambia, and Zimbabwe. Jace Jeesun Han is a 3 Tariffs are confined to published schedules. Because they exclude bilaterally negotiated consultant in the same power purchase agreements and other tariffs not disclosed to the public by the utilities and practice. regulatory agencies, they may not capture payments made by very large consumers, who tend to negotiate tariffs bilaterally. Mining companies in Zambia, for example, have individual power purchase contracts, the details of which are not available by company; only overall average tariff increases and prices may be announced (Bloomberg News 2017). 2 E l e c t r i c i t y T a r i f f s f o r N o n r es i dent i a l C u st o m e r s i n S u b - S a h a r an A f r i c a What features are most prevalent in Time-of-use pricing is surprisingly uncommon. One way to smooth consumption across time is to provide customers, African tariff structures? particularly large ones, with financial incentives to use electricity Separate treatment for large customers can be during off-peak hours. Time-of-use pricing reflects variation in service strengthened; time-of-use pricing is underused delivery costs, which are high during peak periods and low during Tariffs in most countries off-peak periods. The countries of the sample differ in how they incorporate the in Sub-Saharan Africa are Electricity delivered during peak hours is the most expensive following features in their tariffs: to supply, because it depends on the presence of capital-intensive below cost-recovery levels, • Schedules for high-voltage customers spare capacity (for generation, transmission, and distribution). The and power shortages • Time-of-use pricing flatter the aggregate consumption pattern across time of day and • Demand charges are widespread. Tariffs day of week, the less expensive are supply costs. Electricity sup- • Sector-specific tariffs are exceptionally low in plied during peak hours can also be more polluting, because peak • Block tariffs electricity tends to be generated from diesel or fuel oil. Despite these a handful of countries, These features are detailed by country in table 1 and described below. higher costs, almost half of the sample countries do not use time-of- exacerbating the cost- Separate tariffs for high-voltage customers. Supplying use pricing. electricity at high voltage is efficient for large volumes of consump- recovery problem, and high Time-variant pricing provides incentives to avoid electricity tion; it is also the lowest-cost option for the provider. The presence in many others, hobbling consumption during peak hours by charging more during periods of high-voltage customers signals the size and maturity of the power of high demand than during standard and off-peak hours. Options competitiveness, while still sector (a small system is likely to have only low- and medium-voltage include real-time pricing, time-of-use pricing, and critical peak pricing not covering costs. supplies). (in which customers are informed a day or even just a few hours About 60 percent of the countries studied publish tariff sched- before electricity prices go up). ules for high-voltage customers. However, these are not necessarily In the sample countries, time-variant pricing consists of either distinct from medium-voltage tariffs, and high voltage in some different prices at different times of day (dividing a day into two countries may be considered medium voltage in others. or three blocks, labeled as peak, off-peak, and normal, sometimes International standard 60038 of the International Electrotechnical further differentiated by the day of the week) or in different seasons. Commission classifies voltages into four categories. Low voltage is Namibia, South Africa, and Swaziland have seasonally differentiated defined as less than 1 kilovolt (kV); medium voltage is 1–35 kV; high tariffs (winter is the peak season, because of heating demand). South voltage is 35–230 kV; and extra-high voltage is above 230 kV. Virtually Africa and Swaziland also use time-of-use pricing that depends on all countries in Sub-Saharan Africa have medium-voltage custom- the time of day and day of the week. ers, but not all have customers who are supplied at high voltage Eighteen countries in the sample have no time-of-use pricing according to the 60038 classification. As a result, several countries for any customer category. Yet half of them have high-voltage classify some medium-voltage customers as high-voltage customers. customers. Comoros distinguishes between day and night pricing for All but one of the countries studied classify 33 kV as high voltage, medium-voltage customers, but unusually charges more for electric- and Lesotho and Nigeria classify 11 kV as high voltage. Lesotho and ity used at night. Mauritius include only low voltage and high voltage in their tariff Demand charges are nearly universal in countries with schedules. The highest voltage cited in any of the tariff schedules is customers using higher voltages. To ensure cost recovery, 132 kV (in Ethiopia, Kenya, and South Africa). At the opposite end of utilities often charge two-part tariffs, in which a price less than the the spectrum is Liberia, which has only low-voltage customers. average cost is charged per kWh (referred to as the energy charge), 3 E l e c t r i c i t y T a r i f f s f o r N o n r es i dent i a l C u st o m e r s i n S u b - S a h a r an A f r i c a Table 1. Features of nonresidential tariff schedules in selected countries in Sub-Saharan Africa, 2014 Stand-alone categories High voltage in Tariff cites voltage Time-of-use Demand Country tariff schedule of at least 33 kV pricing charge Public lighting Government Agriculture Angola 3 3 3 Benin 3 3 One way to smooth Botswana 3 consumption across time Burkina Faso 3 3 3 Burundi 3 3 3 is to provide customers, Cabo Verde 3 3 particularly large ones, with Cameroon 3 3 3 3 financial incentives to use Chad 3 3 3 Comoros 3 electricity during off-peak Côte d’Ivoire 3 3 3 3 hours. Yet 18 countries in Ethiopia 3 3 3 Gambia, The 3 3 the sample do not practice Ghana 3 3 time-of-use pricing, even Guinea 3 3 3 though half of them have Kenya 3 3 3 3 Lesotho 3 3 3 high-voltage customers. If Liberia some of those customers Madagascar 3 3 3 could be induced to shift Malawi 3 3 3 Mali 3 3 3 consumption to off-peak Mauritania 3 3 3 3 hours, utilities could cut Mauritius 3 3 3 3 3 Mozambique 3 3 3 their supply costs. Namibia 3 3 3 3 3 Niger 3 3 3 3 Abuja, Nigeria 3 3 3 Rwanda 3 São Tomé and Príncipe 3 Senegal 3 3 3 3 Seychelles 3 3 3 Sierra Leone 3 3 South Africa 3 3 3 3 3 3 Swaziland 3 3 3 3 Tanzania 3 3 Togo 3 3 3 Uganda 3 3 3 3 3 Zambia 3 3 3 Zimbabwe 3 3 3 3 3 3 Number of countries 22 8 20 31 23 5 7 Percentage of sample 58 21 53 82 61 13 18 Note: Data are as of July 2014. Mining is not included as a separate category in the table. Only two countries (Ghana and Namibia) publish tariffs for mining as a stand-alone category. Tariffs in Comoros and Liberia depend only on consumption volume and supply characteristics and do not even distinguish between residential and nonresidential customers. 4 E l e c t r i c i t y T a r i f f s f o r N o n r es i dent i a l C u st o m e r s i n S u b - S a h a r an A f r i c a with the balance of the cost recovered through a fee or set of fees Some countries in the sample maintain stand-alone tariff catego- that does not depend on monthly consumption. Demand charges fall ries for government or “administration.”5 But government generally under the latter category. does not enjoy price discounts. One exception is Liberia, where the Demand charges are found in 31 of the 38 countries of the government is among the institutions exempt from the 7-percent tax sample. They are applied primarily for medium- and large-volume on electricity. Burundi, The Gambia, and the Seychelles include gov- Some countries maintain customers. They are usually not levied on residential customers or ernment as a stand-alone tariff category with no special treatment stand-alone tariff other small low-voltage customers. Madagascar and Niger have (it is unclear whether government includes lighting in The Gambia). demand charges for every nonresidential customer category. In Niger Guinea has a category called administration. It pays only the energy categories for government, small nonresidential customers are charged a monthly “fixed” charge charge, but the charge was the highest assessed in Guinea in 2014 but government generally that is exactly proportional to installed capacity down to 3 kilowatt (it fell to second-highest in October 2016, when a higher charge does not enjoy price (kW). (In this note, a charge that varies linearly with installed capacity was levied on foreign institutions, embassies, and nongovernmental discounts. Seven countries is considered a demand charge.) organizations). São Tomé and Príncipe has a category called public Of the seven countries that do not impose demand charges, administration. It has the highest energy charge of all customer have separate schedules two (Ethiopia and Nigeria) have high-voltage customers in the tariff categories and is not exempt from fixed charges. for agriculture. Only two schedule. Seven countries (The Gambia, Mauritius, Mozambique, Namibia, publish separate tariffs for Three countries—Burundi, Mauritius, and Namibia—offer certain South Africa, Swaziland, and Zimbabwe) have separate tariff mining. customers a choice between a schedule with and without a demand schedules for agriculture (Botswana has a category called water charge. The energy charge is higher for the schedule without a pumping, but it is unclear whether it is for irrigation or water utilities). demand charge; above a certain consumption level, it is cheaper to In The Gambia, the lowest nonresidential tariff is for agriculture; it is select the schedule with a demand charge. identical to the lowest rate for residential consumers. Mozambique In some countries, public lighting, government, agricul- is the only country that uses increasing block tariffs for agriculture. ture, and mining may be subject to distinct tariff schedules. NamPower in Namibia has several schedules for agriculture and For equity and other reasons, some countries create different farms, but the tariffs are the same as for commercial use, water customer categories, which pay different tariffs for similar consump- pumping, and mining. Swaziland has separate categories for tion volumes and patterns. Countries may decide to subsidize street smallholder irrigation and large irrigation. The schedule for small- lighting, for example, or agriculture, the largest source of employ- holder irrigation includes time-of-use pricing (both time-of-day and ment and income-earning opportunities in Sub-Saharan Africa. month-of-year variation). The charge for smallholder irrigation is the Public lighting is a separate category in 23 of the 38 countries lowest of all categories; large-scale irrigation has the second-lowest of the sample. About half of these (12 countries) exempt public energy charge, although three additional charges (fixed, demand, lighting from both fixed and demand charges. Of the remaining 11, 6 and access) make these tariffs more costly than residential tariffs. have fixed charges, 3 have demand charges, and 2 have both. Five Zimbabwe uses time-of-use pricing for agriculture, as does Mauritius. countries (Cabo Verde, Ghana, Mali, Mauritania, and Togo) collect a Only two countries (Ghana and Namibia) publish tariffs for fee to fund public lighting.4 mining as a stand-alone category. The fact that other countries do not may in part reflect widespread bilateral negotiations with mining companies. Mining companies may also generate their own electricity if they are operating in remote areas far from the grid or if grid electricity is unreliable. Ghana charges mining companies more 4 By contrast, 12 countries—Benin, Botswana, Burkina Faso, Côte d’Ivoire, Ghana, Kenya, Lesotho, Madagascar, Namibia, South Africa, Tanzania, and Zimbabwe—levy a fee to fund 5 We do not consider government a stand-alone category here if street lighting is explicitly electrification. In addition to charging a fee for rural electrification, South Africa’s utility, Eskom, included, as it is in Botswana, which has a category that covers all government, municipal, and imposes a levy to cross-subsidize urban low-voltage customers. street lighting installations. 5 E l e c t r i c i t y T a r i f f s f o r N o n r es i dent i a l C u st o m e r s i n S u b - S a h a r an A f r i c a than other customers for high-voltage electricity. Namibia applies Table 2 shows the numbers of tariff schedules with various the same tariffs to mining companies as it does to commercial and characteristics in each country. Where the tariff structure differs by agricultural customers and water utilities. Zimbabwe lists mining in location, tariffs in a large city, such as the capital, are examined. In the same category as industrial and commercial customers. some countries residential tariffs are not listed separately; this note Increasing block tariffs are much more common than excludes a category called social tariffs, which we consider residen- Because the unit costs decreasing ones. So-called increasing block tariffs are common for tial even if it is not designated as such. If two or more categories are of supply drop with residential customers. They are intended to cross-subsidize low-con- separately listed but have identical charges, they are counted as a sumption households, which may lack the ability to pay, and to single category. increasing consumption, discourage high consumption. Because the unit costs of supply drop Of the 38 countries studied, 5 have 11 or more categories, 18 cost-reflective tariffs would with increasing consumption, cost-reflective tariffs would suggest, have 6–10 categories, and 15 have 1–5 categories. Fixed charges are suggest, especially in especially in commercial and industrial settings, decreasing rather prevalent: 15 countries have such charges for every nonresidential commercial and industrial than increasing block tariffs. customer category. Demand charges are also common: One-third Just five countries have decreasing block tariffs, including of countries levy demand charges on at least two-thirds of tariff settings, decreasing Burundi, Cameroon, and Mali, which have both. Multiple blocks are categories. Time-of-use pricing is the least common of the surveyed rather than increasing far less common than for residential customers: Of the 38 countries features: Three countries apply it (by time of day or season) to at block tariffs. Yet just five studied, 29 have multiple blocks for residential customers, but only least 80 percent of customer categories. countries in the sample 17 have them for nonresidential customers. In 16 countries with have decreasing block multiple blocks, there is no change in tariff as a result of increasing And what about unit prices? consumption above 1,000 kWh. The only exception is South Africa, tariffs. Monthly bills for the same volume of consumption which has five blocks, the fifth of which starts at 3,000 kWh. differ vastly across countries What patterns emerged from our survey? The unit charges for monthly consumption of 5,000 kWh of electricity A tendency toward cost-sensitive and vary by a factor of 18 across the countries sampled. For monthly consumption of 20,000 and 200,000 kWh, the highest charge is 24 sustainable tariff structures can be detected— times the lowest charge. but it is not universal Monthly bills capture all charges, including taxes and levies Of the 38 countries studied, 33 impose either time-of-use or demand that are passed on to the government or other parties and not charges (see table 1). The tariff schedules of 20 of these countries retained by the utilities. In most countries, more than one tariff class include supply at high voltage (although not necessarily as defined by can be used to compute the bills. For simplicity, where there is a the industry); the remaining 13 have only low- and medium-voltage distinction in the tariff schedule, 5,000 kWh is confined to low-voltage customers. Of the 22 countries that list high-voltage customer cat- nonresidential customers and to commercial rather than industrial egories, only two (Ethiopia and Nigeria) impose neither time-of-use customers (where the two classes can be distinguished). Calculation nor demand charges. Eighteen countries impose both time-of-use of monthly charges for consumption of 20,000 kWh is based on and demand charges, of which 13 also list high-voltage customers medium-voltage customers operating 12 hours a day, 6 days a week in the tariff schedules. Just three countries (The Gambia, Liberia, and (where industrial and commercial categories exist, customers are São Tomé and Principe) have no high-voltage categories in the tariff assumed to be commercial). Calculation of monthly charges for schedule, no time-of-use tariffs, and no demand charges. consumption of 200,000 kWh is for industrial customers operating 16 6 E l e c t r i c i t y T a r i f f s f o r N o n r es i dent i a l C u st o m e r s i n S u b - S a h a r an A f r i c a Table 2. Number of nonresidential tariff schedules with various features in selected countries in Sub-Saharan Africa, July 2014 Number of schedules specifying Total number Demand Fixed Time-of-use Country of schedules chargea charge pricing Multiple blocks Type(s) of block tariffs applied Angola 5 3 0 0 0 n.a. Of the 38 countries studied, Benin 6 4 4 0 0 n.a. 5 have 11 or more tariff Botswana 5 2 5 0 1 Increasing Burkina Faso 8 6 8 4 2 Increasing categories, 18 have 6–10 Burundi 7 2 1 0 2 Increasing and decreasing categories, and Cabo Verde 3 2 3 0 0 n.a. Cameroon 3 1 0 1 2 Increasing and decreasing 15 have 1–5 categories. Chad 4 2 0 1 1 Increasing Fixed charges are Comoros 3 0 0 1 0 n.a. prevalent: 15 countries Côte d’Ivoire 10 9 10 8 1 Decreasing Ethiopia 5 0 5 0 1 Increasing have such charges for Gambia, The 3 0 0 0 0 n.a. every nonresidential Ghana 5 4 5 0 1 Increasing customer category. Guinea 6 2 2 0 1 Increasing Kenya 8 5 8 0 0 n.a. Demand charges are also Lesotho 4 2 0 0 0 n.a. common: One-third of Liberia 1 0 0 0 0 n.a. Madagascar 9 9 9 3 0 n.a. countries levy demand Malawi 6 2 4 2 0 n.a. charges on at least two- Mali 13 1 5 1 11 Increasing and decreasing thirds of tariff categories. Mauritania 6 3 6 1 0 n.a. Mauritius 19 12 19 5 2 Decreasing Time-of-use pricing is Mozambique 8 4 6 0 2 Increasing the least common of the Namibia (Windhoek) 18 15 1 14 0 n.a. surveyed features: Three Niger 10 10 7 3 0 n.a. Nigeria (Abuja) 10 0 10 0 0 n.a. countries apply it (by time Rwanda 2 0 1 1 0 n.a. of day or season) to at least São Tomé and Príncipe 5 0 5 0 0 n.a. Senegal 11 7 3 6 2 Increasing 80 percent of customer Seychelles 6 5 0 0 2 Increasing categories. Sierra Leone 6 1 6 0 1 Increasing South Africa (Johannesburg, City Power) 8 5 7 7 2 Increasing Swaziland 8 6 8 4 0 n.a. Tanzania 4 3 3 0 0 n.a. Togo 12 11 11 4 1 Increasing Uganda 5 3 4 4 0 n.a. Zambia 6 4 6 4 0 n.a. Zimbabwe 7 3 0 3 0 n.a. n.a. = not applicable. a. Any charge that is proportional to kW, kilo-volt-amperes (kVA), or amperes, irrespective of what the charge is called. 7 E l e c t r i c i t y T a r i f f s f o r N o n r es i dent i a l C u st o m e r s i n S u b - S a h a r an A f r i c a Figure 1. Unit price of electricity paid by commercial and industrial customers in selected countries in Sub-Saharan African, 2014 0.6 5,000 kWh/month 0.5 As expected, in 29 20,000 kWh/month Unit price of electricity ($/kWh) 200,000 kWh/month countries the lowest unit 0.4 charge is for monthly consumption of 200,000 0.3 kWh, reflecting economies 0.2 of scale. 0.1 0 Cabo Verde Liberia Burkina Faso Seychelles Senegal Comoros Mali Sierra Leone Benin Gambia, The Togo Kenya Ghana Chad Mauritania Mauritius Rwanda Cameroon São Tomé and Príncipe Uganda Guinea Windoek, Namibia Niger Côte d’Ivoire Johannesburg, City Power, South Africa Tanzania Madagascar, zone 1 Lesotho Zimbabwe Burundi Malawi Swaziland Abuja, Nigeria Botswana Mozambique Zambia Angola Ethiopia Note: Data are for July 2014. hours a day, 6 days a week. Hours of operation of commercial and The wide variation in unit aggregate charges and the complexity industrial customers differ, with industrial customers better able to of tariff schedules suggest high costs, large subsidies, or both, as take advantage of low off-peak prices. In cases where a customer well as significant scope for increasing efficiency of supply and may select from a menu of tariff options, the one with the lowest unit consumption. The variation is much greater than in 27 OECD coun- price is shown. tries for which the International Energy Agency has data (IEA 2016). As expected, in 29 countries the lowest unit charge is for During the same time period, tax-inclusive prices in the surveyed monthly consumption of 200,000 kWh, reflecting economies of scale OECD countries ranged from $0.058/kWh in Norway to $0.198/kWh (figure 1).6 In five countries the lowest per unit charge is for monthly in Japan—a factor of only 3.4. Twelve countries had prices within 10 consumption of 5,000 kWh, perhaps reflecting the desire to keep percent of the median ($0.12/kWh). prices low for small businesses. The unit charge for monthly con- In stark contrast, unit aggregate prices in Sub-Saharan Africa sumption of 200,000 kWh exceeds $0.20/kWh in 14 countries. range from $0.021/kWh to $0.51/kWh for industrial customers consuming 200,000 kWh a month, with a median of $0.17/kWh. 6 Because tariff structures vary markedly across countries, it is not possible to ensure compa- (The two sets of figures are not exactly comparable, because the rability. The results in figure 1 should therefore be treated with caution. 8 E l e c t r i c i t y T a r i f f s f o r N o n r es i dent i a l C u st o m e r s i n S u b - S a h a r an A f r i c a prices for Sub-Saharan Africa are not averaged over all industrial References customers.) The lowest unit aggregate price (in Ethiopia) may signal Bloomberg News. 2017. “Zambia Copper Miners Face $276 Million Bill a large price subsidy: The quasi-fiscal deficit in the power sector in in Power Dispute.” March 20. Ethiopia is four times the cash collected by the national utility (Kojima IEA (International Energy Agency). 2016. “IEA Energy Prices and Taxes and Trimble 2016; Trimble and others 2016). The highest unit aggre- Statistics.” Online database. DOI 10.1787/eneprice-data-en. A well-designed power gate price (in Liberia) reflects a very small grid system that relies Kojima, Masami, and Chris Trimble. 2016. “Making Power Affordable tariff system recovers fixed entirely on diesel generation. for Africa and Viable for Its Utilities.” Washington, DC: World costs through fixed charges Bank. http://www.worldbank.org/en/topic/energy/publication/ Next steps? making-power-work-for-africa. and variable costs through Cross-country comparisons suggest ways to improve Kojima, Masami, Xin Zhou, Jace Jeesun Han, Joeri de Wit, Robert variable charges. Bacon, and Chris Trimble. 2016. “Who Uses Electricity in Sub- nonresidential electricity tariffs in Sub-Saharan Africa Saharan Africa? Findings from Household Surveys.” Policy Almost half the countries in Sub-Saharan Africa impose no time-of- Research Working Paper 7789, World Bank, Washington, DC. use pricing, about one-fifth of them have no demand charges, and https://openknowledge.worldbank.org/handle/10986/25029. three (Comoros, The Gambia, and Liberia) have neither demand nor Trimble, Chris, Masami Kojima, Ines Perez Arroyo, and Farah fixed charges for any customer category. A well-designed power tariff Mohammadzadeh. 2016. “Financial Viability of Electricity Sectors system recovers fixed costs through fixed charges and variable costs in Sub-Saharan Africa: Quasi-Fiscal Deficits and Hidden Costs.” through variable charges. Policy Research Working Paper 7788, World Bank, Washington, As the power sector develops in countries that do not yet make DC. https://openknowledge.worldbank.org/handle/10986/24869. use of fixed charges, demand charges, or time-of-use charges, tariff schedules can be tailored to meet the needs of different customers, Contributors to the collection of the tariff information, including regulatory authorities and utilities, are gratefully acknowledged in Kojima and Trimble reduce costs of supply, and ensure minimum revenues from medi- (2016). This work was made possible by financial support from the Africa um-size and large customers. Taking these steps would strengthen Renewable Energy and Access Program (AFREA), part of the Energy Sector the financial health of the utilities and increase the quantity and Management Assistance Program (ESMAP). quality of grid electricity delivered.